U.S. crude for October delivery was 59 cents lower at $40.73 a barrel at 0328 GMT.
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The US Department of Energy on Wednesday said oil stockpiles rose 2.6 million barrels at August 14.
Brent crude futures, the global oil benchmark, were down 30 cents at $46.86 a barrel, still some way off their 2015 low of $45.19 traded in January. “While this is a clear sign that low prices will lead to less production, it was not enough to convince people yesterday”, Commerzbank senior oil analyst Carsten Fritsch said.
Crude prices finished mixed Thursday, with US oil taking a breather from the market slide that is driven by persistent concerns about high production and a global oversupply of crude.
“This added pressure to crude prices, and we see WTI [West Texas Intermediate] drop below $41, heading towards the key $40 level”. Total U.S. crude oil inventories stood at 456.2 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Citigroup said WTI could fall to $32 a barrel, levels not seen since the throes of the financial crisis, pressured by excess supplies.
US benchmark West Texas Intermediate (WTI) for delivery in September, expiring today, dipped 32 cents to $40.48 after falling sharply in New York to its lowest level since March 2009.
Analysts, however, do not expect oil prices to fall below $40 a barrel.
“It seems as if every time we get some kind of bearish information the market continues to go lower”, he said, emphasising that the market would closely follow Friday’s weekly US oil count.
“We see United States dollars 40 for WTI to be a strong psychological support”.
But US traders are girding for further weakness with the end of summer driving season.
Tamar Essner, director of corporate solutions at Nasdaq says the prospect of increased Iranian oil, “has already been reflected in the dramatic declines in oil prices over the past two months, which has…”
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“We’re probably likely for some further weakness”, said Fred Lawrence, vice president of economics and global affairs at the Independent Petroleum Association of America. The September contract, which expired on Thursday, ended 34 cents higher.
